OREANDA-NEWS. May 04, 2011. The Federal Antimonopoly Service (FAS Russia) initiated a case against the Federal Agency for State Reserves (Rosrezerv) upon the signs of violating Clause 7 Part 1 Article 15 of the Federal Law “On Protection of Competition”, and against the Federal Agency for State Reserves and the Ministry of Agriculture of the Russian Federation upon the signs of violating Article 16 of the Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.

The case was initiated upon the findings of an inspection of the Federal Agency for State Reserves, when FAS Russia discovered instructions to allocate in 2010 some material values from the state reserve - grains - for borrowing by particular economic entities without payment for the period of six months in order to stabilize the grain market and reduce adverse impact of free sale of grains upon the price level on domestic market of the Russian Federation.

Under Article 4 of the Federal Law “On State Material Reserves”, the procedures for managing material state reserves are determined by the Government of the Russian Federation.

FAS Russia thinks that the Federal Agency for State Reserves did not have the grounds to make a decision about influencing the domestic grain market in the Russian Federation and to grant state support to particular economic entities without specific acts of the Government of the Russian Federation, or without advance consent of FAS Russia for granting state preferences.

As a result of concerted actions of the Federal Agency for State Reserves and the Ministry of Agriculture, the Federal Agency for State Reserves distributed material values out of the state material reserve in the form of priority borrowing, which restricted market entry of other economic entities, operating on the grain market.

“The authorities granting preferences to particular economic entities in breach of the established procedures is one of the most serious violations of the antimonopoly law that destroys competitive environment”, said the Head of the FAS Russia’s Department for Control over the Authorities, Vladimir Mishelovin.

Reference:

1. Clause 7 Part 1 Article 15 of the Federal Law “On Protection of Competition” prohibits granting state or municipal preferences in breach of the procedures established in Chapter 5 of this Federal Law;

2. Article 16 of the Federal Law “On Protection of Competition” prohibits competition - restricting agreements or concerted actions of federal executive bodies, the authorities of the constituent territories of the Russian Federation, local self-government bodies, other bodies or organisations exercising the functions of the above bodies as well as state extra-budgetary funds, and the Central Bank of the Russian Federation.